Digital Brands Group Secures $3M Convertible Note and $100M Equity Line Amid Cash Crunch
DBGI sits 51% above its 52-week low of $10.316.
Summary
Digital Brands Group raised $3.0 million via a convertible note with a 15% OID and secured a $100 million equity line of credit, both with deeply dilutive terms, as the company fights to stay afloat.
Key Events · Financing and Capital Events · DBGI
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$3M Convertible Note with 15% OID
The company issued a $3,529,412 principal convertible note for $3,000,000 in cash, reflecting a $529,412 original issue discount. The note matures January 23, 2027, with monthly amortization payments of $1M starting October 23, 2026.
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$100M Equity Line of Credit
Simultaneously, the company entered into an ELOC allowing it to sell up to $100 million of common stock to the investor at 95% of the lowest daily VWAP or traded price, with a 1% commitment fee payable in shares.
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Toxic Conversion Terms
The note converts at the greater of 90% of the lowest closing price in the 5 days prior to conversion or a floor price of $0.09898, subject to further adjustment. The ELOC purchase price is 95% of the lowest price during the valuation period, creating significant dilution risk.
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Registration Overhang
The company must file a registration statement within 15 days to register 200% of the note shares and all ELOC shares, with liquidated damages of 10% of the subscription amount per 30-day delay if not effective within 75 days.
Analysis · DBGI · Trade & Services
Digital Brands Group entered into a highly dilutive financing package: a $3.0 million convertible note with a 15% original issue discount and a $100 million equity line of credit. The note carries a 20% default rate and converts at a discount to market, while the ELOC allows the company to sell shares at 95% of the lowest price during a valuation period. Both instruments are classic toxic financing structures that can severely dilute existing shareholders. The company is burning cash — its last 10-Q showed a near-total collapse in gross profit and a working capital deficit — and this deal provides immediate liquidity but at a steep cost. The note must be repaid in $1M monthly chunks starting October 2026, and the ELOC registration will create a massive overhang. The filing also reveals a 3% placement agent fee on all draws, adding to the cost of capital. This is a survival move, but the terms suggest few alternatives were available.
How filings like this one have moved
In the 30 days to Sep 13, 2026, 42% of the 419 measured filings Wiseek scored 9 moved their stock by 5% or more by the next session's close. The median move was -0.47%. These are measured outcomes after filings of this importance, not a forecast for this one.
Measured one observation per ticker per day, after exclusions. Current figures: Filing Impact Tracker · open dataset
At the time of this filing, DBGI was trading at $15.56 on NASDAQ in the Trade & Services sector, with a market capitalization of approximately $11.5M. The 52-week trading range was $10.32 to $720.00. This filing was assessed with negative market sentiment and an importance score of 9 out of 10.